WeekWatch for 6th July 2020
Balina Rai (Dhesi)
Wealth Management Consultant at Lawrence Neil Wealth Management Limited
Markets are waiting for a coronavirus vaccine as keenly as a furloughed worker scanning the driveway for an Uber Eats delivery. So, it was no surprise that they enjoyed another boost last week after positive COVID-19 vaccine trial results made the headlines. They rose again on better-than-expected US jobs figures on Thursday, which showed a drop in unemployment from 13.3% to 11.1%. Together, these pieces of good news contributed to a broad rally last week that saw the S&P 500 end the quarter up 20%.
The rally defied reports of a surge in coronavirus cases in the US, with daily infections topping 50,000 for the first time on Wednesday. Populous states like Texas and California were badly affected. Investors are keenly aware of the risks this presents, and one sign of their growing caution came from the lower-rated end of the US bond market, where investors sold junk bonds at the fastest rate since the start of the pandemic on news of the increase in cases.